The more positive diplomatic atmosphere between Iran and the US has given regional stock markets a lift — offering a timely boost a few weeks before financial results for the second quarter of the year start to emerge.
The interim deal between Tehran and Washington prompted an uptick over several days in the Abu Dhabi and Dubai markets. Dubai’s DFM General Index broke through the 1 trillion dirham ($272 billion) market capitalization barrier on June 17; the following day, both it and Abu Dhabi’s ADX General Index hit their highest levels since the war broke out. Although the momentum has since faded, the markets have held onto most of the gains.
Both UAE markets are still below their prewar levels, as are the exchanges in Bahrain and Qatar, but bourses in Kuwait, Oman, and Saudi Arabia are above that threshold. Two big factors are likely to dictate the future direction of travel: Progress in the US-Iran talks could prompt further gains, but Q2 results could contain some unwelcome surprises about the extent to which the conflict has harmed economic activity.
